El Salvador targets $9 billion in transfers, but chooses stablecoins

El Salvador is turning to stablecoins for remittances, further separating everyday payments from the country's pioneering Bitcoin experiment.

Sivar, a new national community and payments app developed by Modveon, will use Coinbase infrastructure to settle transfers in stablecoins on Base, according to a Sept. 29 announcement. Users in the US can fund transfers with debit cards, while recipients in El Salvador receive the value through wallets embedded in the app.

The rollout marks an evolution for a country that made Bitcoin legal tender in 2021 partly on the promise that the cryptocurrency could make cross-border payments cheaper. Five years later, El Salvador still promotes Bitcoin, but dollar-backed tokens are increasingly being deployed for payments.

Sivar abstracts the crypto infrastructure from users, allowing people unfamiliar with digital assets to send and receive money without managing the underlying blockchain transaction themselves.

Coinbase Chief Policy Officer Faryar Shirzad said the economics work because the transfers move entirely in digital dollars.

Sivar targets a $9 billion remittance corridor

The opportunity is substantial in a country where money sent home by Salvadorans abroad remains a major source of household income.